BHP targets India for expansion

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Hard on the heels of its discussions with the Russian government over prospective energy sector investments, BHP Billiton is pursuing large-scale steel and port projects in India, according to press reports.

It is considering participating in a Posco-led steel project in Orissa, on India's east coast, and a proposed specialty port project in the same area.

South Korea's Posco is planning a 3 million tonne a year steel plant, which could be expanded to 10 million tonnes a year, to be located in Duburi, according to a report in The Times of India late last week.

BHP Billiton's involvement was not clarified in the report.

Posco is rivalled by Indian conglomerate Tata Steel, which is also pursuing plans for a steel plant in the same area, where it already controls iron ore reserves. Tata is discussing a 6 million tonne a year steel plant.

India produced 36.2 million tonnes of steel in the past 12 months, falling short of meeting domestic demand.

Posco and BHP Billiton are also believed to have expressed interest in establishing a power plant between Duburi and Dhamra, which forms part of the steel project proposal.

Separately, BHP Minerals has tendered to build an all-weather port at Gopalpur, in southern Orissa, the Business Standard newspaper reported. Five companies, including BHP Minerals, have tendered for the project, with a shortlist of bidders yet to be finalised.

BHP is already a large supplier of iron ore and coking coal, which is used to make steel, to India, and has been reviewing exploration prospects there for some time, as well.

The Indian government has said that it wants to see domestic steel output raised to about 100 million tonnes by 2018 since per capita steel consumption in India is less than 30 kilograms annually - about half that of Vietnam and less than a quarter of Thailand.

BHP is also pursuing a 1 million tonne a year aluminium smelter, using locally mined bauxite.